FSLR - NASDAQ

Good afternoon. And welcome to First Solar, Inc.'s Q4 and full year 2025 Earnings and 2026 Guidance Call. This call is being webcast live on the Investors section of First Solar, Inc.'s website at investors.firstsolar.com. All participants are in listen-only mode. Please note that today's call is being recorded. I would now like to turn the conference over to your host, Byron Jeffers, Head of Investor Relations. Good afternoon.

And thank you for joining us on today's earnings call. Joining me are our Chief Executive Officer, Mark R. Widmar, and our Chief Financial Officer, Alexander R. Bradley. During this call, we will review our 2025 results and discuss our outlook for 2026. After our prepared remarks, we will open the line for questions. Before we begin, please note that today's discussion contains forward-looking statements and actual results may differ materially due to risks and uncertainties. We undertake no obligation to update these statements due to new information or future events. For a discussion of factors that could cause these results to differ materially, please refer to today's press release, our SEC filings, and the earnings materials available at investors.firstsolar.com. On this call, we will also reference certain non-GAAP financial information. This non-GAAP financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. A reconciliation of our non-GAAP items to their respective nearest U.S. GAAP measure can be found in our earnings press release and our earnings presentation. With that, I will turn it over to Mark.

Beginning on slide four, good afternoon, and thank you for joining us today. I will share key highlights and accomplishments from 2025. We entered the year on the new U.S. administration with a back-weighted shipment profile that required staging production to fulfill contracted commitments concentrated in the second half. Amid a persistently uncertain policy and trade environment. Over the course of the year, we navigated a budgetary reconciliation process which created the One Big Beautiful Bill Act, evolving tariff scenarios, customer negotiations, and regulatory developments, including Section 232 actions, FEOC restrictions, and AD/CVD investigations that are still unresolved and could ultimately prove to be either headwinds or tailwinds. Throughout, we remained anchored to a core guiding principle and a key differentiator valued by our customers: contract certainty, both in pricing and in timely delivery. To honor our obligations, we maintained sufficient capacity to fulfill international module commitments and actively pursued various contractual protections to address shifting tariff dynamics and, in some cases, contract terminations. Given that backdrop, we took a disciplined, selective approach to customer contracting throughout the year. That approach is proving effective. Since our last earnings call, we secured gross bookings of 2.3 gigawatts excluding domestic India volume, and 0.1 gigawatt of low-bin inventory clearance. We booked 1 gigawatt in our key U.S. utility-scale market at an ASP of $0.364 per watt, inclusive of applicable adjusters. By remaining patient, selective, and opportunistic, we capitalized on demand that recognizes the differentiated value of our products and contracting structure, strengthening the forward earnings profile of our backlog and positioning us to navigate and potentially benefit from ongoing policy and trade uncertainty. We are pleased to have delivered record sales of 17.5 gigawatts of modules in 2025. Net sales of $5.2 billion were at the top end of our most recent guidance range and represented a 24% year-over-year increase. Full year diluted EPS was within our most recent guidance range at $14.21 per share. We ended the year with $2.9 billion of gross cash and $2.4 billion of net cash, coming in above our guidance range. Our growth continued in 2025 as we advanced our U.S. capacity expansion, highlighted by initiating commercial production in Louisiana, our fifth U.S. factory. In addition, we announced plans to onshore the finishing of Series 6 modules initiated at our international factories by adding U.S. finishing capacity with a new facility in South Carolina. We expect production from this facility to begin in 2026 and ramp through 2027. We also advanced our CdTe-based CURE semiconductor platform. Following a limited commercial production run from Q4 2024 to Q1 2025, we delivered initial CURE modules to customers in 2025. Based on laboratory and field testing results, CURE has demonstrated the expected advantaged energy profile driven by industry-leading temperature coefficient and long-term degradation rate with improved bifaciality. These results continue to support a disciplined factory-by-factory CURE conversion rollout expected to begin next month starting at our Ohio Series 6 factory. In parallel with our CdTe-based CURE platform, we advanced our next-generation perovskite thin film program. Our focus remains on efficiency, energy attributes, reliability, and a scalable path to high-volume, low-cost manufacturing of this potentially transformational thin film. We launched the perovskite development line at our Perrysburg campus and reached full in-line processing capabilities in Q3, marking an important step in the lab-to-fab transferability and enabling production of smaller form factor modules using anticipated manufacturing tools and integrated processes. In late 2025, we initiated sourcing for a perovskite Series 6 module form factor pilot line, which we expect to reach operational readiness in early 2027. While we made promising progress in 2025, additional work remains before more broadly scaling our perovskite program. Lastly, we continue to actively enforce our intellectual property rights, including our TOPCon patents. Notably, in Q4, the U.S. Patent and Trademark Office denied three separate petitions filed by foreign-headquartered manufacturers that sought to invalidate aspects of our TOPCon portfolio. This outcome reinforces our confidence in the strength of our patent portfolio. I will now turn the call over to Alexander R. Bradley to discuss our most recent shipments and booking activities as well as our Q4 and full year 2025 results. Thanks, and beginning on slide five. As of 12/31/2024, a contracted backlog totaled 68.5 gigawatts, valued at $20.5 billion, or approximately $0.299 per watt. For the full year 2025, we sold 17.5 gigawatts of modules, secured 7.4 gigawatts of gross bookings, and recorded 8.3 gigawatts of debookings, primarily due to our termination of contracts as a result of contract breaches by customers, resulting in net full-year debookings of 0.9 gigawatts. We ended the year with a contracted backlog of 50.1 gigawatts valued at $15 billion. As a reminder, the contracted backlog reflects the base ASP. A significant portion of our existing contracted backlog includes pricing adjusters that may increase the base ASP, contingent on achieving specific milestones within our technology roadmap and manufacturing replication plan. At year-end, approximately 23.2 gigawatts of contract volume included these adjusters, which we estimate could generate up to an additional $600 million, or approximately $0.03 per watt, the majority of which we recognize in 2027–2028. Turning to the P&L on slide six. Q4 net sales were $1.7 billion, a $100 million increase sequentially. Full year net sales were $5.2 billion, a $1 billion increase year over year, driven primarily by a 24% increase in module volume. Gross margin in Q4 was [percent omitted in source], an increase from 38% in the prior quarter. The increase was driven by a higher mix of U.S.-manufactured modules benefiting from Section 45X tax credits, lower nonstandard freight charges due to reduced international shipments, and the resolution of the glass supply chain disruption experienced in Q3 at our Alabama facility. These benefits were partially offset by ramp and underutilization costs for Louisiana, a higher proportion of sales into the India market, and the termination amounts recognized in the third quarter related to breach contracts by affiliates of BP. Full year 2025 gross margin was 41%, a decrease from 44% in the prior year. The decline was primarily driven by tariff costs as well as the impact of tariffs exacerbating warehousing expense associated with a back-weighted revenue profile, detention and demurrage, partially driven by supply-demand imbalance following certain contract terminations due to customer default and underutilization from the curtailment of our Series 6 international facilities. These headwinds were partially offset by $1.6 billion of Section 45X tax credits recognized in 2025, plus $1 billion in 2024, driven by a higher mix of U.S.-manufactured module volumes sold. As an update on warranty-related matters, we resolved certain claims and have continued to advance negotiations with additional customers regarding warranty claims for select Series 7 modules produced prior to 2025. Based on our settlement experience, the estimated number of affected modules, and projected remediation costs, we believe a reasonable estimate of potential future loss will range from approximately $35 million to $75 million. Within this range, we have recorded a specific warranty liability of $50 million, representing our best estimate of the expected impact associated with this issue. We are aware of certain statements, including in recent counterclaim filings by affiliates of BP, relating to overall PV plant underperformance. While we will not comment on existing litigation, we do encourage a review of our initial complaint filed last year as well as our answer to those claims and our motion to dismiss filed earlier this month. To relate to overall PV project, we would note that solar plant performance relative to expectations is influenced by a broad set of environmental, design, operational, and grid-related factors. These include, but are not limited to, third-party prediction modeling, weather variability, terrain variability, local microclimates, shading and soiling, procurement and design decisions relating to trackers, inverters, trunk transformers and other plant components, design and construction parameters including EPC quality, DC and AC system design, construction and handling, and operational factors including tracker algorithm design and fidelity, open circuit conditions, and overall O&M scope and quality. In short, a solar plant's performance reflects its total environment and system design. As we have consistently stated, First Solar, Inc. fully stands behind its module warranty obligations. To the extent a customer has a valid module warranty claim, we remain ready, willing, and able to perform our responsibilities pursuant to the procedures agreed to in our warranty. SG&A, R&D, and production start-up expense totaled $117 million in Q4, a decrease of approximately $27 million relative to the prior quarter. The decrease was primarily driven by the reduction of start-up costs associated with the Louisiana facility commencing commercial operations. For the full year 2025, operating expenses were $523 million, an increase of $59 million year over year. This includes a $42 million increase in R&D expense, driven by higher depreciation, maintenance and utility costs associated with our research facilities as well as increased headcount and compensation. SG&A increased by $15 million driven primarily by higher allowance for credit losses on aged receivable balances and supplier loans. Our fourth quarter operating income was $548 million, which included depreciation, amortization and accretion of $141 million, ramp and underutilization costs of $29 million excluding depreciation, production start-up expense of $1 million, and share-based compensation expense of $3 million. For full year 2025, our operating income was $1 billion which included depreciation, amortization and accretion of $529 million, ramp and underutilization costs of $140 million, production start-up expense of $86 million, and share-based compensation expense of $19 million. Interest income, interest expense, other income, and foreign currency losses totaled $3 million in income in Q4, and $16 million expense for the full year. Income tax expense for the fourth quarter was $30 million compared to a tax expense of $4 million in the third quarter. This quarter-over-quarter increase in tax expense was primarily a function of Q3 benefits including a $20 million discrete tax benefit associated with the acceptance of a filing position on amended tax returns in a foreign jurisdiction, and incremental share-based compensation benefits recorded in the prior quarter. We recorded full year income tax expense of $53 million. Q4 earnings per diluted share were $4.84 compared to $4.24 in the previous quarter. For the full year 2025, earnings per diluted share were $14.21 compared to $12.20 in 2024 and within our guidance range. Turning to slide seven, I will cover select balance sheet items and summary cash flow information. The aggregate balance of our cash, cash equivalents, restricted cash, restricted cash equivalents and marketable securities was $2.9 billion at year-end, an increase of $800 million sequentially and $1.1 billion year over year. Both the sequential and full-year increase in gross cash were driven primarily by proceeds from the sale of Section 45X tax credits generated during the year and positive operating cash flows, partially offset by capital expenditures for our Louisiana facility. We monetized €800 million of 2025 Section 45X tax credits in the fourth quarter, and $1.4 billion during the full year. Notably, in January 2026, we also received $118 million for 2024 Section 45X tax credits where we elected a direct pay option in our 2024 tax return filed in October 2025. The sale transactions highlight the liquidity of the Section 45X tax credit sale market. The IRS refund provides insight into direct pay election turnaround times, providing additional visibility and flexibility to optimize credit monetization and manage overall liquidity. Accounts receivable and inventory decreased both sequentially and relative to the prior year, reflecting improved customer collections and higher volumes sold. Capital expenditures were $172 million in the fourth quarter compared to $24 million in the third quarter. Full year 2025 CapEx was $870 million compared to $1.5 billion in 2024. Our year-end net cash position was $2.4 billion, an increase of $900 million from the prior quarter and an increase of $1.2 billion from the prior year. Now I will turn the call back to Mark, who will provide an update on market conditions, policy, and technology.

All right. Thank you. Turning to slide eight. In 2025, the policy and trade environment remained complex. While we are experiencing significant direct and indirect tariff impacts, in our view, on balance, the environment is net favorable for First Solar, Inc., an example of genuine, long-standing U.S.-based solar manufacturing. In contrast, in our view, headwinds beyond reciprocal tariffs and commodity cost increases continue to build for the crystalline silicon industry. A combination of tighter trade enforcement, potential retroactive tariffs, pending Section 232 actions, expanding Foreign Entities of Concern (FEOC) restrictions, and greater intellectual property enforcement is increasing cost, timing, and compliance risk for developers relying on crystalline silicon products with ties to China. With respect to trade, it is notable that the Trump administration has withdrawn its appeal against a U.S. Court of International Trade ruling in the Auxin litigation requiring the retroactive collection of previously suspended AD/CVD tariffs. If this ruling is maintained, which appears increasingly likely, mounting contingent liabilities for AD/CVD duties associated with this unlawful two-year moratorium could represent an as-of-yet unrealized material financial impact on those foreign producers that relied on it. In fact, one recent industry publication noted that “U.S. Customs is suggesting that no panels that came in during the moratorium qualified for the moratorium.” In support of true domestic manufacturing, we are encouraged by interim Treasury guidance issued earlier this month that, in our view, clearly signals the administration's intent to address gamesmanship by China-tied solar manufacturers seeking to evade U.S. regulations and benefit from tax incentives by artificially shuffling ownership stakes, voting rights, or IP licensing with the intent of evading FEOC status. We anticipate that the forthcoming FEOC restrictions will be aligned with the legislative intent of prohibiting access to tax credits for entities with sudden corporate restructuring lacking business purpose. We also commend Commerce's preliminary CVD determinations issued earlier today as part of the broader Solar 4 AD/CVD investigation into Laos, India, and Indonesia, which reflect subsidy rates of approximately 81%, 126%, and 104%, respectively. Note these preliminary CVD rates do not include preliminary antidumping rates, which will be additive and are expected to be determined in April. It is expected that final aggregate AD/CVD duties will be decided in September. We expect that the final AD/CVD duties applied in Solar 4 will again support a level playing field against the illegal and unfair trade practices of Chinese-headquartered and other silicon producers who strategically evade U.S. trade laws. Finally, IP enforcement must be considered within the overall legal framework that includes these recent legislative and regulatory headwinds confronting the crystalline silicon industry. Earlier today, we filed a petition with the U.S. International Trade Commission (ITC) against 10 groups of foreign-headquartered manufacturers that we believe are producing products infringing on one of our U.S. TOPCon patents. Now this is a separate action from our three actions seeking monetary damages against affiliates of Adani, Canadian Solar, and Jinko in the U.S. District Court. If the ITC institutes an investigation based on our complaint, we expect that the matter would be decided in approximately 18 months. If our case is successful, the ITC may issue a general exclusion order preventing importation of infringing TOPCon products made by foreign entities, or in the alternative may issue a limited exclusion order preventing the importation of infringing TOPCon products by the entities named in our complaint. In addition, the ITC may issue a cease and desist order preventing the sale of infringing TOPCon products currently in the United States. Note the IP-related headwinds confronting the crystalline silicon industry are reflected not just by First Solar, Inc.'s recent and continued enforcement efforts, but also by the recently reported $236 million settlement entered into between Maxeon and Aiko just days before a U.S. patent court was due to decide their patent dispute. In summary, the policy and trade environment, together with sustained intellectual property enforcement across the industry, have continued to generate mounting uncertainties for U.S. developers that are dependent on suppliers tethered to China-tied supply and/or IP. On the topic of technology, turning to slide nine, our strategy remains anchored in a simple premise. Customers ultimately buy lifetime energy, not just nameplate efficiency. And our roadmap is designed to optimize the balance of efficiency, energy yield, and cost, while leveraging our industry-leading thin film expertise. We continue to believe the next step change in solar will be enabled by thin film platforms such as perovskites. We are well aware that many in the industry are seeking to crack the code of this potential next generation of advanced thin film technology. However, we believe the winner of the perovskite race will also need to have the ability to manufacture the product cost-competitively in a high-volume manufacturing environment. As the world's leader in thin film PV technology, and the world's only manufacturer of thin films at scale, we believe we are uniquely positioned to advance this prospective device, given our nearly three decades of not only thin film R&D learnings, but high-volume thin film manufacturing experience. Our technology strategy continues to be primarily concentrated on two core thin film–focused pillars. Firstly, we are executing a disciplined, phase-gate introduction of CURE, responsibly bringing this new technology to market with proven laboratory results and expanding field validation. Consistent with our prior outlook, we expect to permanently convert the Ohio lead line to CURE in Q1, providing a pathway to enhance the energy attributes and competitiveness of our Series 6 platform, and then rolling out these enhancements to our Series 7 platform at successive factories. Executing CURE remains strategically important because it is designed to enhance the attributes that translate into lifetime energy, including improved temperature response and degradation behavior, which are highly valued by utility-scale customers. With adding the improved energy attributes of CURE to the current energy advantages of thin film CdTe, such as superior spectral and shading response, CURE can deliver up to 8% more lifetime specific energy yield than crystalline silicon TOPCon technology in the markets we serve. Our second pillar, perovskites, is a key part of our effort to develop next-generation thin film semiconductors that can be deployed at commercial scale in both our traditional utility-scale markets while potentially expanding our addressable market segments. Today, we have achieved reliability results we believe are comparable with best-in-class R&D efforts, by continuing to advance efficiency and stability—two of the industry's key hurdles to scaling perovskite technology. A major enabler of these efforts is our dedicated perovskite development line in Ohio. As announced prior to the beginning of the call, we have entered into an agreement with Oxford PV, the holder of what we believe is the most fundamental portfolio of perovskite-related patents. In terms of this agreement, Oxford PV will license to us on a nonexclusive basis its existing issued and currently pending patent applications. We believe that this agreement will advance our freedom to develop, manufacture, and sell crystalline-silicon–free perovskite-based semiconductor modules in the U.S. utility, commercial, and residential markets. I will now turn the call back over to Alexander R. Bradley, who will discuss our 2026 outlook and guidance.

Thanks, Mark. Before turning to our financial guidance, I want to briefly reiterate our approach to managing the business amid a dynamic market, policy, and trade environment. We entered 2026 with a backlog of 50.1 gigawatts, despite taking a highly selective approach to bookings over the past two years. We expect to continue this strategy in 2026 as we await the outcome of and impact on forward module demand and pricing from the numerous political, regulatory, and legal matters discussed earlier in the call. We believe our market position with non-FEOC and high U.S. content supply on a proprietary thin film platform remains long-term advantaged, and our existing contracted backlog relative to our production capacity provides us with the ability and flexibility to be patient. Regarding 2026 U.S. deliveries, many of our customers continue to face both regulatory and commercial challenges, including federal permitting approval delays. As we previously stated, we will continue to work with customers to accommodate schedule shifts where possible, consistent with our philosophy of supporting our long-term partnerships, even while we are not contractually required to do so. We entered 2026 with a fully allocated position for our U.S. production. Given tariff uncertainty, our India production is assumed to be sold into the India domestic market. We will continue to monitor opportunities to export products into the U.S. where it is margin accretive to do so. Our guidance assumes our India facility operating at full capacity, with the ability to flex production as needed through the year in response to changes in demand signals. Demand for our Series 6 international products produced in Malaysia and Vietnam remains constrained. Our decision in 2025 to establish a new finishing line in the U.S. allows us to make use of a portion of the front-end of these Southeast Asian facilities, optimizing freight, tariffs, and domestic content for the sale of incremental products into the U.S. domestic market. We intend to run our remaining end-to-end in Malaysia and Vietnam at low utilization rates this year, despite the financial impact of doing so, maintaining a near-term option to increase throughput should catalysts such as the political and regulatory matters discussed earlier drive incremental profitable demand. Slide 10 shows our capacity and forecast production for 2026 and into 2027. Nameplate capacity reflects current output entitlement at full scale, throughput, and yield, with downtime solely for planned maintenance. Production reflects nameplate capacity adjusted for factory ramp, other downtime including for technology and tool upgrades, and any planned reduction in throughput including due to market demand. As it relates to technology, as previously noted, we expect to recommence running Series 6 CURE products in Perrysburg this quarter. Assumed in our 2026 production forecast for India is downtime associated with tool upgrades, with the intent of beginning CURE production on our first Series 7 line in India in early 2027, followed by the remainder of the Series 7 fleet thereafter. Additionally, our Southeast Asian capacity is reduced significantly in both 2026 and 2027 due to the removal of tools destined for our U.S. finishing line, as well as their reuse in our perovskite development work. By 2027, U.S. finishing is forecast to be 3.5 gigawatts, with the remaining Southeast Asia capacity of 1.8 gigawatts for fully finished international Series 6 modules. The projected U.S. nameplate capacity of 14.9 gigawatts in 2026, growing to 17.1 gigawatts in 2027 with the scaling of Louisiana and South Carolina. We expect global nameplate capacity of 19 gigawatts in 2026 and 22.1 gigawatts in 2027. And note, we expect U.S. nameplate to continue to increase as we drive technology, throughput, and yield improvements. In terms of production, as previously noted, we expect significant underutilization of our international Series 6 facilities. India is assumed to run high throughput, with the ability to flex production as needed based on local demand and international sale options. We forecast U.S. production of 13.0 to 13.3 gigawatts this year, and 14.9 to 16.1 gigawatts next year. This results in total forecasted production of 16.5 to 17.5 gigawatts in 2026, and 18.9 to 20.5 gigawatts in 2027. Turning to slide 11 and other assumptions embedded within our guidance today. Spectrum volumes sold of 17.0 to 18.2 gigawatts is above forecast production, as we reduce inventory levels by year-end. We forecast a U.S. ASP of approximately $0.308 per watt, slightly above our contracted backlog. This includes certain freight, tariff and commodity recovery, and technology upside. We expect limited ASP upside from CURE sales in 2026, largely as a function of contractual notification deadlines relative to the timing of the decision to recommence CURE production. Combined with India domestic sales, the majority of which we expect will book and deliver within the next year, we forecast the global ASP recognized at approximately $0.287 per watt. Cost per watt sold is forecast to remain relatively flat year over year at approximately $0.267 per watt, which includes the impact of tariffs and the impact of reshoring U.S. manufacturing, largely recognized through ramp and underutilization expense, and excludes the benefit of Section 45X credits generated by domestic manufacturing. Including the benefit of Section 45X credits, cost per watt sold is projected to be down approximately $0.03 per watt year over year. Cost per watt released from inventory is expected to increase approximately $0.02 per watt year over year. Approximately half of this increase is forecast to come from a mix shift as both Southeast Asia production reduces and Louisiana/Alabama increases. The other half to come as a result of multiple factors, including increases in tariff costs, increases in core bill of material costs, increases in utility rates, and downtime for technology upgrades. Period costs are expected to decrease by approximately $0.02 per watt from a combination of lower standard sales rates due to greater domestic mix shift, effective elimination of nonstandard freight charges as a function of reduced international product imports, reduced warehousing costs, and other period cost reductions. To provide some more color, we forecast total net tariff cost impact across bill of material and finished goods imports, recognized in both cost of goods produced and period costs towards cost of goods sold, at $155 million to $175 million. Net of expected contractual recoveries on finished goods sold, we expect a total tariff impact of $125 million to $135 million. This assumes a Section 122 tariff in place for 150 days at 15%, impacting all bill of materials, works in progress, and finished goods imports in that time period. In addition, certain commodities, including aluminum, are subject to long-lasting higher rate Section 232 tariffs. Note that we recognize the P&L impact of tariffs at the time of product sale. Our total tariff impact in 2026 reflects higher tariff rates paid on bill of materials, works in progress, and finished goods imports incurred prior to the recent Supreme Court decision. Tariffs also indirectly lead to underlying commodity cost pressure for our variable U.S. bill of material, including relating to aluminum, steel, glass, interlayer, targets, and spares. In addition, electricity rate hikes increase fixed costs. These cost increases are not contractually recoverable from our customers. Sales rates are forecast to be approximately $0.014 per watt in 2026. Warehousing-related costs of approximately $200 million are down from 2025, but remain high and are part of the function of underutilization of space driven by a forecast Southeast Asian curtailment. Beginning in 2027, we expect to reduce warehouse costs to a longer-term run rate of approximately $100 million per year. Forecast ramp and underutilization expense of $115 million to $155 million are a function of curtailing Malaysia/Vietnam capacity as well as the ramp of our U.S. finishing line. Start-up cost is expected to be $110 million to $120 million, driven primarily by the ongoing depreciation and logistics associated with idle finishing equipment in transit, as well as certain tariff-related costs incurred to import that equipment and warehousing such equipment for use at our new South Carolina facility. And finally, a note on capital structure. Our strong balance sheet remains a strategic differentiator and allows us to navigate periods of volatility, including near-term supply and demand imbalances in certain international markets, while continuing to support R&D investment, technology capital spend, and capacity growth, including localizing the U.S. solar supply chain in support of energy security and national policy objectives. We ended 2025 in a strong liquidity position and have since enhanced financial flexibility by entering into a new $1.5 billion senior unsecured revolving credit facility with improved commercial terms, greater flexibility, and more relaxed covenants. In 2026, we intend to fund CapEx through cash on hand and operating cash flow. We plan to prepay the remaining balances outstanding under our India credit facilities, including our loan with the DFC, ahead of its scheduled maturity. Doing so enables us to optimize our jurisdictional capital structure, increase the capacity of our local working capital facilities, while reducing exposure to India rupee volatility-related hedging costs. Separately, while not assumed in our guidance, potential monetization of 2026 Section 45X tax credits provides additional liquidity optionality. Our capital allocation priorities remain unchanged. Firstly, we prioritize maintaining a resilient working capital reserve of approximately $1.5 billion to $2 billion to account for industry cyclicality and uncertainty, and short-term supply and demand imbalances. Secondly, we deploy cash to fund growth and replicate technology improvements across the fleet. Thirdly, we invest in innovation through R&D and targeted capital investments, as well as strategic enablers such as licensing arrangements, to advance our technology roadmap, including perovskite optionality. Fourthly, we will consider M&A, which we are actively evaluating to pursue complementary technology-adjacent opportunities to reinforce our strategic differentiation. As we near the conclusion of recent years of sustained high CapEx associated with manufacturing capacity growth, we will evaluate applying cash generation in excess of the above capital priorities to share repurchases. We will provide an update on this later in the year, pending clarity around certain factors including policy catalysts, realization of new bookings volume, and any decisions around 2026 Section 45X tax credit monetization. I will now cover the full year 2026 guidance ranges on slide 12. Our net sales guidance is between $4.9 billion and $5.2 billion. Gross margin is expected to be between $2.5 billion and $2.6 billion or approximately 49.5%, which includes $2.1 billion to $2.19 billion of Section 45X tax credits, and $115 million to $155 million of ramp and underutilization costs. SG&A expense is expected to be between $215 million and $225 million and R&D expense between $285 million and $290 million. The primary driver for our increase is due to higher investment in advanced research, including expanded perovskite and innovation center activity, and planned headcount additions. SG&A and R&D expense combined is expected to total $500 million to $515 million. Total operating expenses, which includes $110 million to $120 million of start-up expense, are expected to be between $610 million and $635 million. Clearly, within our R&D expense guide for 2026 are approximately $100 million of costs associated with perovskite development. Going forward, we intend to guide on an adjusted EBITDA basis, which we believe provides the accuracy of our underlying operating performance and enhances comparability across periods. We forecast full-year adjusted EBITDA of $2.6 billion to $2.8 billion. From a first-quarter earnings cadence perspective, we expect module sales of 3.4 to 4.0 gigawatts, Section 45X tax credits of $330 million to $400 million, resulting in adjusted EBITDA of between $400 million and $500 million. Capital expenditures in 2026 are forecast to range $800 million to $1 billion. Approximately half of the spend is for capacity expansion, primarily the South Carolina finishing line and the Louisiana plant. Remaining spend is expected to be split evenly between CURE in India and R&D technology replication and maintenance. We expect to end 2026 with gross and net cash balances between $1.7 billion and $2.3 billion and assume a full repayment of our India credit facility with the U.S. International Development Finance Corporation by 06/30/2026. With that, we conclude our prepared remarks and open the call for questions. Operator?

We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Brian K. Lee with Goldman Sachs & Co. Your line is open. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking the question. I guess just on the ASP front, Mark, you mentioned the $0.364 per watt, including adders for the U.S. bookings this quarter. How much did the adders add there? And then is that sort of the level of entitlement, 36 and above, that you would expect for U.S. bookings through the rest of the year? Maybe can you comment on visibility you have on the pricing environment from this point forward? And then just secondarily on the gross margins, I would be curious, I mean, if you factor out underutilization and the 45X credit, it is implying kind of a 10% component gross margin in the guidance even if I know there are a lot of moving pieces, Alex, but when do you get back to high teens, 20% type of gross margin for components the way you were at in 2024? And what are some of the big bridges to get back there?

Alright. I will do the ASP conversation and probably suggest Alex cover gross margin. So there is about, call it, 2.5 to 3 cents of the value of the adder in terms of the ASP, that $0.364. So that is about the numbers. The CURE attributes will give you close to 3 cents. Now not everything that was booked in that $0.364 actually had the adder. So if you broke it out a little bit, you are potentially going to see slightly higher prices for the CURE attributes for the product that we booked with the CURE attributes. But, you know, look, I think the entitlement-wise, I feel good about the pricing that we are at now, but I think there are some more catalysts that could still happen. I think some are leaning in with all the uncertainty that we referenced on the call in terms of what happens with FEOC and what window are they trying to book into given the constraints with FEOC. And I think if we continue to see more momentum there, we just obviously saw the Solar 4 announcements, which obviously are going to address imports coming in from those three countries that we referenced. So there are potentially more tailwinds, depending on how they play out, that could support even better pricing as we move forward. But I think, visibility-wise, I think that is kind of a good indication of where we expect the market pricing to be relative to the CURE technology.

Yeah. Brian, on the gross margin, so if you back out the 45X, it is about a 7% gross margin. And if you think about that against the $5 billion revenue profile, about $350 million of gross margin. So, if you try and walk that back up to, call it, the 20% number we have talked about before, this year we have got about $165 million of tariffs sitting in there, about $135 million on underutilization. So you are about $300 million or so there, about six points of margin. You have got about $200 million of warehousing. I think we said in the prepared remarks that will come down to about $100 million on a run-rate basis next year. So pick up another $100 million there—another two points to margin. And if you look at the adjusters we talked about, $600 million in the backlog mostly recognized in 2027, 2028—so take $300 million across each of those years—that is another six points of margin that kind of walks you back up to around about $1 billion of gross margin and a 20% number. So tariff is obviously still in there. That is an impact that we are still wrestling with. But I would also say you have got incremental volume coming in next year which is not backed against that, and the contribution margin benefit of that, even ex-IRA, is going to be meaningful. I would also say we are trying to look at this on an ex-IRA basis, but it is challenging to do that to some degree because we are adding incremental costs both by U.S. manufacturing and also by the mix shift to bringing more production into the U.S. And we are doing that, and that allows us to enable us to capture that 45X credit. So I know we are looking on an ex-IRA basis, but if you think about it with the IRA included with that 45X, yes, the core shows 7% this year and the walk-up that we talked about just now, you have got 43 points of IRA. So the gross margin on a GAAP basis will be 50% this year relative to 41% last year, which is the highest we have seen. So obviously, we want to keep growing the core underlying non-IRA, and there is a path there, as I said, that takes you back up to that 20% and or about $1 billion at that $5 billion revenue profile. But you cannot ignore the two and the interconnectedness of the fact that we are reshoring capacity, and that does come at a cost, both direct cost and mix shift cost, to enable us to capture those 45X benefits.

And, Brian, maybe I want to add a couple things too. One, back on the pricing environment, because I also want to make sure this is clear, is that product—or that ASP—is also reflective of, largely influenced by, a domestic content product, right? Now what we do a lot of times is it is agreed to around some number of points, which allow us to bring in some amount of international volume, assuming the tariff rates are amenable, such that we can blend international. But if we ended up doing a straight-up international deal, for example, with some of the capacity we have available with our Malaysia/Vietnam facilities, I would expect that price point to be closer to $0.30. So I just want to make sure that is clear. So if we actually end up booking some of that international volume as we go forward, you may see a lower ASP there because of that dynamic. I want to make sure that is clear. Then the other one just to Alex’s point around tariff. The other thing that is creating some headwind for us this year is—and we have mentioned this before—there is insufficient glass supply in the U.S. And we have been working to bring in basically brownfield and mothballed facilities and getting them up and operational. But to support the scaling that we have right now, we are bringing in some sun glass internationally and using it in our U.S. production. And that is creating a cost headwind. My inbound freight costs are higher. I am bearing the cost of the tariffs. And what we would expect to do as we scale up our supply chain here in the U.S., which we are in the midst of doing, is we will see less of a dependency on that import of glass, which will also help us a little bit on our gross margin profile.

Your next question comes from the line of Julien Patrick Dumoulin-Smith with Jefferies LLC. Your line is now open. Please go ahead.

Thank you. Thank you all very much. Appreciate the opportunity to connect here. If I can ask you first off, just to reconcile on the volumes produced versus sold. Can you comment a little bit about just what you are seeing here of late? Separately, can you comment a little bit about what you are actually seeing in terms of sell-through on volumes out of Asia? I know your prepared comments had some nuance on this, but elaborate a little bit about both Southeast Asia and India—what you are assuming here in 2026 and what you are seeing preliminarily for 2027 as well?

Yeah. So, if you go to the slides, we give you a walk on what we are expecting to produce versus sell. The delta between the two is about 700 megawatts coming out of inventory. So that is the gap you are seeing between produced volume and sold volume. And we gave you the U.S. number for sold. You can see it in there—it is 12.129. So the 9.33 in the script—I will come back to you. But, yeah, the delta is coming out of inventory. What was your second question, Julien?

I think part of it is your question was on the sell-down in Southeast Asia, I think, is what you are asking.

Yeah. On Southeast Asia. What are the dynamics? So let us talk through that.

So India is going to produce, call it, 3 gigawatts or so this year and will be sold into the Indian market. We are actually going to have a really strong quarter. We had a really strong Q4 and we will have a strong Q1 in India. So demand in India is strong. So we have 3 gigawatts or so, a little bit north of that because we have some inventory sell-through, that we will sell in 2026 in India—domestically manufactured, sold into the India market. Now on Southeast Asia, those factories are kind of running 20% or so. I mean, they are extremely underutilized. And what Alex said in his prepared remarks is that we are looking at this almost as option value. Now some of that capacity will be fully utilized once we get our South Carolina facility up because the front-end capacity for, call it, half of the Southeast Asia manufacturing will come to the U.S. So that will solve a piece of that underutilization. The other half is going to continue to be underutilized at a very low utilization rate. But we are looking at this as really an option to allow some of these potential tailwinds around FEOC and other things to play themselves out to see what the impact of that could be to create more demand for those international operations. We also, as we indicated in our last call, are trying to work with a couple of counterparties on potentially meaningful volume offtake for that international production. But that is all still in the works. It is still going to be largely tethered back to what happens in the policy environment. But we are incurring significant underutilization and cost headwinds because what we are trying to do right now is figure out, let us create an option, let us evaluate what we continue to see in the market. And we have been wearing this for over a year now. It was about a year ago when these tariffs came in place, and we started to throttle down, kind of towards the ’22, ’23. And we have run at a very low utilization rate to try to buy some time to see how these tariffs ultimately get played out.

Your next question comes from the line of Mark Wesley Strouse with JPMorgan. Your line is now open. Please go ahead.

Yes. Good afternoon. Thanks for taking our questions. Within the last couple of months, there was an individual with a vast amount of resources that is talking about ramping up a supply of U.S.-based solar panel production over the coming years. Just curious if that is having any real impact on the conversations you are having with your customers, especially as you look out to later this decade? And I have a quick follow-up. Thanks.

Yeah. Look, I was very much aware of the announcement and the ambitions. From my understanding, a lot of that is not necessarily focused for our utility-scale market that we are primarily focused on. I think it is primarily looked to be captive for their own consumption for their own programs that they are envisioning. It is also out in the horizon, and I think there is also a pretty strong realization of some pretty significant challenges to try to get to that type of scale. And if you are really thinking about as fully vertically integrated all the way from polysilicon forward, if you are only trying to solve the constraint at, let us say, the cell level, you have to think through how do you solve the wafer, how do you think through the polysilicon, and the capital investment to try to move all that forward is going to be pretty overwhelming. And the technical aspects around it as well of understanding freedom-to-operate issues. We have already talked about there are IP infringements all over the place within the crystalline silicon world. And everybody is going to stand up and try to protect their IP where it makes sense. So, it has not really impacted our conversations yet. I think if they got to a realization where you started to see sites being announced, actual equipment being purchased, operations being commenced, then I think it could maybe start to inform our customers’ use of other thoughts and ideas. But as of right now, it is having very little impact.

Mark, just wanted to comment around that. And as you are well aware, the constraint that we are seeing in the market for hyperscalers right now is access to power. We have just gone through the process of looking to site our new finishing line. The biggest constraint we faced around that was land with available power to connect. So again, Mark mentioned you have got capital constraints—which even that could be overcome—constraints around knowledge and know-how. You have also got the constraint of how you would power these facilities if you are trying to build to that scale. You would be in the same constraints that the hyperscalers have today.

Okay. Thank you for that. That makes sense. And then I just want to ask a clarifying follow-up to Brian Lee’s question earlier. When you said the $0.364 is for the domestic content, are you saying that that is the blended rate—so it would be a higher amount than that for the U.S. domestic content averaged with whatever, $0.30 for international—or is that $0.364 how we should be thinking about the domestic content portion?

Yeah. So the way—we tried to mention this a little bit last time. The way we actually price is we negotiate with the customer some number of points that they need, given their already procured strategy around procurement strategy around the IRA in particular, and then what are the incremental points that they need relative to the window that they plan on putting the project into service. And so we will negotiate a points construct, which then gives us the optionality to blend whatever percentage we can internationally. And we are in a pretty good balance between the domestic S7 and the international S7. We can optimize there pretty well, assuming we choose not to sell into the India market. Where we are a little bit more misaligned is really with only having, call it, 3 gigawatts of capacity for S6 in the U.S. and then trying to match that up with 7 gigawatts of international production, which makes it harder because you cannot really blend that much international to achieve, let us say, a 30% or 40% or 50% requirement that a customer has. Now moving some of that finishing capacity into the U.S. also brings in some domestic content, so that helps move that equation a little bit. But what I was trying to say is that if you have no domestic content at all embedded into a blended price construct, you are going to see a much lower ASP. So if I go out and say, okay, I want a customer to buy 500 megawatts of international only with no domestic content value, and you may see some of that in some customers that are doing a PTC project as an example, because the uplift on the PTC is not as meaningful as it is on the ITC, those prices are going to be lower. And I just want to make sure that is clear and that is understood—that you could see a delta. I know I said $0.30 or somewhere in that range. If you are selling just a pure international S6 product into the U.S. market, you would see a lower ASP clearing price.

Your next question comes from the line of Philip Shen with Roth Capital Partners. Your line is now open. Please go ahead.

Hey, guys. Thanks for taking my questions. First one, just was wondering if you could give us a little more color on why no EPS guide for 2026. And then secondly, in terms of the ASP implied for the 2026 guide, it seems like the U.S. ASP might be a little bit low. I think in 2025, it was closer to $0.324, but the implied U.S. ASP in the 2026 guide seems to be closer to $0.308. So I was wondering if you might be able to give some color on that. And then finally, on Oxford PV, can you share what kinds of efficiencies you are able to generate? What are you seeing in your test modules, if any? And then what is your sense of timing as to when commercial volumes could actually ramp? Thanks, guys.

Yes. So on the EPS, we are moving to guiding to EBITDA. We think it gives a better view of operational performance and better comparability year over year. And especially in a year like this year, where you have got significant costs associated with both underutilization of our Southeast Asia facilities as we are deliberately curtailing those—as Mark mentioned, waiting for an option around whether there is profitable capacity or profitable production to be had there to serve the market—and we have got significant start-up and ramp production. Historically we have not done that, but this is a lot different where start-up costs are as we are moving that equipment from Southeast Asia to the U.S., and so effectively taking tools we already have in the ground and idling them for a significant period of time. That makes it more comparable. On the tax side also, we have got potential challenges around Pillar Two this year, which will make the tax number very noisy going down to EPS. So on a kind of core non–Pillar Two basis, expect very low tax expense for the year, but because the agreement is not yet been finalized, there is a potential chance we will have to accrue significant Pillar Two expense, which ultimately we do not believe will ever get realized on a cash basis. But until those agreements are finalized, we would have to accrue that. I think it helps us with comparability as well. On the ASP side, so your number is right, $0.308. If you look at what is in the backlog, it is around $0.30. So about what is in the backlog coming out of that ASP with a little bit of uplift relative to some adjusters we get around freight and around commodities. And then there is a little bit of upside on the tech side as well there. If you think about—we mentioned on the adjusters going forward about $600 million or about $0.03 a watt on average of adjuster value sitting aligned with the CURE platform, and most of that we said will be realized in 2027–2028, which is when we will start having much more CURE product available to us. So this year, we have limited CURE production, and given the timing of our decision to run that CURE relative to the notification timings in the contracts, we are going to see very limited upside from that this year. So that is why you are seeing that U.S. ASP around $0.308.

And I think the other thing, Phil, when you are looking at your year on year, you have to remember that last year, as we realized throughout the year a handful of terminations—obviously the largest one being the Lightsource bp termination—which obviously impacts revenue, but you would have to normalize, pull that out of your top-line revenue, then do your math from that standpoint. But that clearly provided some incremental uplift to the reported ASP last year because of some of those terminations. As it relates to Oxford PV, or just our perovskite program, basically what we are doing right now, Phil, is we have a development line where we are doing small form factor modules. Think they are like 60 centimeters by 20 centimeters or so. These are actual fully functional small form factor modules that we are producing in an actual integrated production process and doing all of our conversion of some of the efforts that we do in our advanced research, whether it is in California or whether it is in Sweden, and then we are doing all that testing within our development line. And if you look at our—as we said in the prepared remarks—if you look at our efficiencies and what we are seeing in stability, we are best in class from many, many, many ways—many different dimensions. So I feel good about where we are from a program standpoint, but there are still fundamental challenges that have to be addressed, and we are very good at understanding the nuances of thin films. We understand the issue of metastability. We understand the impact of encapsulating the thin film to protect the thin film. We have a number of what have been identified as best-in-class particular Chinese perovskite products. And if you put those out into a test field as we have, first off, they will even tell you in their literature that they give you: do not expose the module open circuit, which means effectively once you install it, it has to be immediately energized. And if you choose to expose it to open circuit, it degrades almost instantaneously in some cases. There are others that because their encapsulation is insufficient, the film just starts to over time effectively pull apart. So there is a huge significant delamination that happens with the film, and it cannot sustain itself over extended periods of time. And so there are many, many factors that factor into how you commercialize a product. So our view is we need to think about—we are working on all of those—the development not just to drive the efficiency, also to drive the attributes to a point where they are competitive and then to manufacture that in a way that creates an enduring product that can be in the field for 30-plus years and perform at attributes that are relatively close to the current thin film technologies that we have, and then we can do that all in HVM and do that in a way that we can do it cost-competitively. So there are many different things that we are working on in that regard, Phil. So I would just say we are pleased with where we are. Our next phase is we will be investing—we have already started our procurement process—to put together a pilot line that will make full-size modules, largely still for development purposes. We will deploy those modules in the field as well, some commercially with customers. And then as we evolve the development program, as we evolve the HVM issues in larger form factors—because anytime you scale from something that is, call it, 20 by 60 centimeters to something that is 2.5 meters, there are issues you will have to deal with through that scaling process, and especially the uniformity of the film. Once we are better informed around how well that is progressing, that will determine overall commercial readiness. But the entitlement here is an efficiency number that is 20% plus, an LTR that is competitive, a bifaciality that is, call it, 70%, and a tempco that is, you know, somewhere in the mid-teens, which is better than we have now with CdTe. That is the aspiration of what we are trying to accomplish, but a lot of work between now and then.

Your next question comes from the line of Vikram Bagri with Citi. Your line is now open. Please go ahead.

Good evening, everyone. I wanted to ask sort of a two-part question about CURE and potential for cancellations. First on India, can you talk about the pricing environment? I was wondering if you can give confidence that the sales in the market are viable, the pricing is stable, is expected to stay stable throughout the year. Understand there is no sizable spot market in the U.S., but is there a possibility some of that volume can be redirected to the U.S. given 15% tariffs now in place? And then finally on India, it seems there is a lot of domestic capacity for panels being ramped up. How do you think about that capacity in the long term and the viability of that market for solar panels? And then as a follow-up on cancellations, you have historically mentioned pricing and EU players pulling back investments from renewables in the U.S. market has created this risk of cancellations. With lower tariffs, how are the conversations going with customers? Is that risk much lower now? And if you can quantify how much of the contracts are potentially at risk of cancellations. Thank you.

Alright. I will deal with the India question first, and I do not know if you got the tariff question. Okay. So, look, what I would say is right now, pricing is a point to look at in India—it is lower. What I would say, though, is we are effectively realizing high-teens to low-20% gross margin. So if you want to look at it from a gross margin standpoint, because I think you have to understand the cost of manufacturing in India is significantly lower than what the cost of manufacturing is in the U.S. So, yes, lower pricing, but you basically balance that out with a lower cost of production. You are realizing high-teens to low-20% type gross margin in India. So that is obviously where we stand right now. And if you look across the horizon of how would we optimize that production—and one of the things I think you said is the risk of overcapacity—look, I agree that there is that risk, but there is also what is counterbalancing that and why there is also robust demand for our product and technology in India is that the Approved List of Models and Manufacturers in India is now moving further upstream. So it started off with the module itself. Now, effectively, for any project that is commissioned in April or Q2, there will now be a cell requirement to be made domestically, and then they have also foreshadowed already a wafer requirement that effectively starts to come into effect in 2028. And there is not existing vertically integrated manufacturing capability in India at this point in time. And I think what manufacturers have seen is that it has become more challenging as they try to get into cells, and then even more so as they try to get into the wafer. And then, obviously, they are trying to figure out the poly side of the house as well. So a lot still needs to happen from that standpoint. We also believe that from a cost standpoint, even if that vertically integrated supply chain were to happen, we will be cost-advantaged with our vertically integrated manufacturing facility with everything being done within the four walls of a factory. So there is a cost advantage, we think. We also believe we have an energy advantage, which will be further enhanced when we implement our CURE technology in India, which will start in 2027. So I look across the horizon, feel like I have a better product, better technology. I have a better policy environment that should continue to advantage us in terms of India. As a backdrop, to your point, we will continue to evaluate the construct of potentially bringing some of that product into the U.S. market, and we will do some of that with a view of creating some competitive tension into the domestic market, because I do not want customers to believe that they do not have an alternative path other than selling into the domestic market. I would like to be able to say, sure, if it is the right tariff construct, we can also redirect the product and blend it in with some S7 domestic product and then still command pretty good pricing. It is a little bit choppy to continue to move back and forth because today we primarily make a fixed-tilt product for the India market and then to have to convert the back to make a tracker product for the U.S. market or export market—that is a little clunky and you can incur some downtime and some cost, and transportation of bringing that product into the U.S. is more expensive than what we would like. So, ideally, if we can just harmonize and keep running that factory all out, serving the domestic market, getting good ASPs, that is our preferred path, but we clearly would look at bringing some of that into the U.S. market if the situation and the dynamics are right.

Yeah. Vikram, you asked around cancellation risk and whether tariffs are playing a part there. Look, tariffs coming down are fairly helpful, but I do not think what you have been seeing on the cancellation side over the last year has really been tariff related. So the two are not necessarily linked. What we have said before and what we have been seeing is more of a strategic shift by certain players, especially oil and gas, and the European utility players, to reallocate capital away from renewable development in the U.S. into some of their more core business on oil and gas development or European utility development. So where we have seen some of those players move away, we have seen others enter into the space in the U.S. to pick up some of that slack and see an opportunity in taking over those projects to develop them. So it is hard to handicap a cancellation risk in the backlog. Sure, it could exist. Historically, what we have seen has been essentially more risk around the international product, just given the value of domestic content. If you look at today, the amount of international product sitting in our backlog is pretty small. You can see that by how much we are producing in Southeast Asia this year relative to U.S. product. And so that product has potentially been more challenged. I think U.S. demand has been strong. And even if there were cancellations, we have much more opportunity to move any terminated U.S. products back into the U.S. market. I would also say that clearly, we have been enforcing termination penalties and fees and making sure that we capture the value in the contract. So if there is a contractual obligation for someone to pay an amount for terminating those contracts, we have been enforcing that. We will continue to do so.

This will be our final question. Our final question will come from the line of Ben Kallo with Baird. Your line is now open. Please go ahead.

Hey, guys. Thanks for putting me in here. I just wanted to square your time to power—it is a big question or big emphasis out there. And I know you have so many moving pieces. And just bookings, I am trying to square time and power and the need for electrons with how you guys are doing bookings, but, you know, your different moving pieces right now. Thank you.

Look, I think, Ben, you have to remember we have a luxury—we are kind of in a nice position. We have got 50 gigawatts of contracted volume that is going to carry us forward. There is a clear sense of urgency from customers around execution and time to power. There are customers that obviously have safe harbored under Section 48, and they need to get their projects commissioned by the end of 2028. There are others that are safe harbored under 45, and those who are continuing to safe harbor because they can do that up to the middle of this year, then get an opportunity to get projects done through the end of 2030. So there is quite a bit of demand. Our customers are also dealing with a lot of angst of trying to figure out permitting issues and other things they are trying to do, financing issues, getting things in place for the current projects that they are executing against in construction and what have you, and then thinking through a longer position around their portfolio—both earlier stage and late stage development. So that sense of urgency is there. People are being really creative, looking to do more on-site generation, try to get out from underneath the constraint of the interconnections. But if a customer does have an interconnection agreement, they are running hard and they are making sure they are lining up their modules as well as their EPC agreement and balance of system equipment to make sure they can execute on time. So it is a clear catalyst. I also think it is helping us as we engage and we talk with customers around pricing as well.